DVD No Dog at DreamWorks

Profits were down for DreamWorks Animation SKG during fourth-quarter 2008, but that didn’t keep company executives from staying upbeat, especially about DVD.

“It’s important to note that 2008 was our most successful non-‘Shrek’ year ever,” said CFO and President Lew Coleman, during a conference call with investors Feb. 24. “[Sales of Madagascar: Escape 2 Africa are a] clear indication that the home video market for us remains encouraging.”

Sitting on top of the national home video sales chart for two weeks running, Madagascar is only behind The Dark Knight and Iron Man in 2009 sales, Coleman said, with 5 million units shipped as of Feb. 22.

“The sales we are seeing now will probably represent 65% to 75% of the total volume we’ll see,” said company COO Ann Daly.

The company posted profits of $51.6 million for the quarter, down 45% from $94 million during the same period in 2007. For the year, DreamWorks posted profits of $142.5 million.

CEO Jeffrey Katzenberg said DVD sales of Kung Fu Panda have outperformed the company’s estimates, with the title hitting 11.2 million units shipped through the end of 2008, and accounting for about 80% of the $101.8 million the title contributed to the fourth quarter.

Both Bee Movie and Shrek the Third contributed more than $9 million each to the quarter, also primarily through home entertainment sales. At the end of 2008, more than 21.4 million units of Shrek the Third had been shipped.

Katzenberg added that less retail competition during the first quarter of 2009 has seen higher price points for DreamWorks DVDs, and that retailers are opting for special editions of Madagascar: Escape 2 Africa over the standard edition, at a rate of 50%.

“We are an offensive player in this [economic] arena,” he said. “Our customers, in an unexpected way, are trading up to premium.”

For Blu-ray Katzenberg offered no breakdown compared to DVD sales. But he did say: “It’s a very small part of our business to date. We like the Blu-ray platform, but it’s not a meaningful part of our business right now.”

Katzenberg also looked forward to the March 27 release of Monsters vs. Aliens, its first to go 3-D.

“We believe that Monsters vs. Aliens will reset the bar for what moviegoers should expect from a CG animated film and are confident that it will offer our audiences a premium viewing opportunity.” he said.